Extracts from the speech of the Union minister for commerce and industry, Arun Jaitley, on the announcement of Export and Import Policy 2003-2004, March 31

All that glitters

Exactly a year back,... Thiru Murasoli Maran had announced the export and import policy for the five year period 2002-07 coinciding with the 10th five-year plan. This policy recognized that international trade is a vital part of development strategy and that it can be an effective instrument of economic growth, employment generation and poverty alleviation. In line with the medium-term strategy for exports, the policy adopted the goal for India to reach 1 per cent share of global merchandise trade by the year 2007, up from...0.67 per cent. For this, Indian exports have to grow at 12 per cent per year and to double in dollar terms from roughly $40 billion per annum to $80 billion.

A frequently asked question is the need for an annual exim policy when a five year policy has been announced and is in place. The basic objective of a five-year policy is two fold. It reflects the priorities for development of the economy as set out in the five year plan. It also provides a stable policy environment to the exporters...However, today international trade is not only highly competitive but also dynamic. Market conditions change almost daily requiring quick response and more importantly, anticipation. Five years is too long a period of a policy to continue without refinements. Therefore, it is imperative that we frame annual exim policies after assessment of the export performance and changes in the international market in the previous year and based on our anticipation of market movements in the short term.

Let me first take stock of what has been achieved in the year since the five-year policy was announced. It is gratifying that provisional figures of exports for the period April, 2002 to February, 2003 indicate that exports have grown by as much as 16.76 per cent in dollar terms (and 18.8 per cent in rupee terms) over the same period in the preceding financial year. Growth of exports from export oriented units, special economic zones and erstwhile export processing zones sector has been over 20 per cent during this period. This growth has been contributed mainly by textiles, gems and jewellery, engineering products particularly auto and auto ancillaries, drugs and pharmaceuticals, chemicals and agro products. What is noteworthy is the significant contribution by high value-added manufacturing sectors. Moreover, sizeable growth is visible in our exports to major markets such as the United States of America, the European Union and Southeast Asia. This has been achieved in the face of global recession, particularly in the US market, following 9/11.

It not only shows the resilience of the Indian exporters but also underscores their growing confidence and competitiveness of Indian products. Lest we become complacent, let me caution that this growth has been achieved against the backdrop of near stagnation of exports in the earlier year.

...In specific terms, exports during April, 2002 to February, 2003 amounted to Rs 2,23,249 crore as compared to Rs 1,87,876 crore during the same period in the previous year. Textiles contributed Rs 45,509 crore as compared to Rs 41,809 crore during the previous year representing a growth rate of 8.85 per cent accounting for a share of 21.31 per cent in the total exports. Gems and jewellery contributed Rs 38,032 crore as compared to Rs 30,453 crore in the previous year representing a growth rate of nearly 24.89 per cent accounting for a share of 16.97 per cent. Chemicals and related products contributed Rs 32,805 crore as compared to Rs 27,518 crore with a growth rate of 19.21 per cent and a share of 14.64 per cent. Engineering goods contributed Rs 31,152 crore as compared to Rs 24,650 crore with a growth rate of 26.30 per cent and a share of 13.90 per cent. What is a matter of particular satisfaction is that the export of agriculture and allied products contributed Rs 18,907 crore compared to Rs 17,320 crore in the previous year with a growth rate of 9.16 per cent and a share of 8.44 per cent.

That brings me to the objective of achieving 1 per cent of the world merchandise trade by 2007. If the present trend continues, we may not only reach the target but also surpass it. It is almost certain that the merchandise exports will cross the $ 50 billion (approximately Rs 2,42,300 crore) milestone this year. But for the uncertain conditions in the west Asia, we might even have reviewed our target. Suffice it to say, we shall strive to sustain the present rate of growth and to accelerate it through the initiatives...in the exim policy 2003-04. Exports can act as the motive power of growth for a rapidly developing economy...For this, exports have to be recognized as a national priority by the all agencies of government of India and state governments and the private sector.